A one-minute briefing on state pension ages and longevity

The state pension age should rise more slowly in Scotland than in the rest of the UK, senior ministers in the Scottish National Party have argued.

Shona Robison, Scotland's new pensioner rights secretary, said Scottish residents were being "short-changed" by an estimated £50,000 because of a failure to take into account lower life expectancy north of the border.

What are the plans for the state pension age?

Under current legislation, the state pension age will rise to 67 between 2034 and 2036 and 68 between 2044 and 2046.

However, the Coalition has outlined proposals to accelerate this timetable. The plan is to bring forward the move to 67 to 2026 and complete the transition to age 68 by 2028. The plans have not been approved by Parliament yet.

The Government also wants to establish the parameters for linking the pension age to life expectancy. This would probably mean a rise to 69 in the 2040s and 70 by 2060, although some academics suggest the ages could be higher and arrive sooner. [Look up your new state pension age]

What about Scotland?

The same plan applies to Scotland, but the SNP argues today that longevity should be factored in to state pension ages on a more local level. Longevity already influences annuity rates under a so-called "postcode lottery".

The SNP published a report that referenced figures showing that the average British 65-year-old man was expected to live 18 years, compared with 14.9 years for Glaswegian men. The average British woman lives a further 20.9 years at 65, more than two-and-a-half years longer than the average woman in Glasgow.

In financial terms, the SNP said a man in Glasgow received, on average, £29,000 less in state pension payments, or £22,000 for women. When comparing Glasgow with affluent Harrow in north-west London, where the longevity gap is six years, the state pension difference is £50,000 over the course of a retirement.

Overall, Scottish women receive £11,000 less than the UK average and men get £10,000 less, the analysis suggested.

How does it work with private pensions?

The pension system will be overhauled, with new rules next April which will mean fewer annuities being bought. But the system is one that captures regional longevity, albeit in a crude way.

Annuities, which savers can buy with their pension pot to provide a fixed income, are priced based on individual postcodes. Somebody buying an annuity in Glasgow will be offered far more than someone in Bath, to reflect the statistically higher chance they will die sooner because of poor diet and higher rates of smoking and drinking.

And the politics?

Asthe Telegraph reports today, the use of the figures to promote the case for Scottish independence has been called "appalling", especially given the financial implications.

Could Scotland afford an earlier state pension age?

Experts have warned that Scotland’s “dependency ratio” – the number workers paying taxes to fund each OAP’s state pension – would be worse than the UK’s.

Earlier this year David Davison, who sits on the pension committee of the Institute of Chartered Accountants of Scotland, calculated that each current worker would have to pay an extra £700 to afford the state pension in a separate Scotland.